FIRST DIVISION

SAN MIGUEL CORPORATION, G.R. Nos. 168194 & 168603

Petitioner,
Present:
Davide, Jr., C.J. (Chairman),
- versus - Quisumbing,
Ynares-Santiago,
Carpio, and
Azcuna, JJ.
CAROLINE C. DEL ROSARIO,
Respondent. Promulgated:

December 13, 2005

x ---------------------------------------------------------------------------------------- x

DECISION

YNARES-SANTIAGO, J.:

The instant consolidated petitions for review seek to set aside the (1) January 7,
2005 Decision of the Third Division of the Court of Appeals in CA-G.R. SP No.
83725,[1]affirming the December 30, 2003 Resolution[2] of the National Labor
Relations Commission (NLRC) in NLRC NCR CA No. 036413-03, and holding
that respondent Caroline C. Del Rosario, was a regular employee of petitioner San
Miguel Corporation whose dismissal was valid but ineffectual for non-compliance
with the requirement of one month notice in termination due to redundancy; and
the (2) February 23, 2005 Decision of the First Division of the Court of Appeals in
CA-G.R. SP No. 84081,[3] which reinstated the Labor Arbiters June 16, 2003
Judgment[4] finding that respondent is an illegally dismissed regular employee of
petitioner. Likewise questioned are the June 16, 2005[5] and May 13,
2005[6] Resolutions of the Court of Appeals which denied petitioners motions for
reconsideration.
The facts show that on April 17, 2000, respondent was employed by petitioner as
key account specialist. On March 9, 2001, petitioner informed respondent that her
probationary employment will be severed at the close of the business hours of
March 12, 2001.[7] On March 13, 2001, respondent was refused entry to petitioners
premises.

On June 24, 2002, respondent filed a complaint against petitioner for illegal
dismissal and underpayment/non-payment of monetary benefits. Respondent
alleged that petitioner feigned an excess in manpower because after her dismissal,
it hired new recruits, namely, Jerome Sanchez and Marilou Marfil and re-employed
two of her batch mates, Rosendo To and Ruel Rocha.[8]

On the other hand, petitioner claimed that respondent was a probationary employee
whose services were terminated as a result of the excess manpower that could no
longer be accommodated by the company. Respondent was allegedly employed on
April 17, 2000[9] as a temporary reliever of Patrick Senen, an account specialist,
who met an accident. Anticipating an increase in sales volume, petitioner hired
respondent as an account specialist on a probationary status effective September 4,
2000 and was assigned at petitioners Greater Manila Area-Key Accounts Group
(GMA-KAG) Beer Sales Group. However, petitioners expected business growth
did not materialize, hence, it reorganized the GMA-KAG, and created the
Centralized Key Accounts Group. This restructuring led to an initial excess of 49
regular employees, who were redeployed to other positions, including the one
occupied by respondent. Her employment was thus terminated effective March 12,
2001.[10]

On June 16, 2003, the Labor Arbiter rendered a decision declaring respondent a
regular employee because her employment exceeded six months and holding that
she was illegally dismissed as there was no authorized cause to terminate her
employment. The Arbiter further ruled that petitioners failure to rebut respondents
claim that it hired additional employees after she was dismissed belie the
companys alleged redundancy. The dispositive portion thereof, reads:

WHEREFORE, premises considered, judgment is hereby rendered

declaring the dismissal of complainant as illegal and ordering her
 reinstatement with full backwages, moral and exemplary damages of
P50,000.00 plus 10% attorneys fees, computed thus:

Backwages:

2003-6-16
2001-3-17 = P9,000.00 x 27 mos. = P243,000.00
2-2-29

Holiday Pay:
P9,000.00/26 days = P346.15/day
=P346.15 x 20 days = P6,923.00

Service Incentive Leave

P346.15 x 10 days = 3,461.50
13th Month Pay
P9,000.00 x 27 mos./12 = P20,250.00
P273,634.00
SO ORDERED.[11]

On appeal by petitioner to the NLRC, the latter modified the decision of the Labor
Arbiter holding that respondent is a regular employee whose termination from
employment was valid but ineffectual for petitioners failure to comply with the 30-
day notice to the employee and the Department of Labor and Employment
(DOLE), thus

WHEREFORE, premises considered, Respondents appeal is partly

GRANTED. The portion of the Labor Arbiters assailed Decision in the
above-entitled case, finding Complainants dismissal illegal and ordering
her reinstatement, is SET ASIDE. It is hereby declared that
Complainants dismissal from employment is valid but ineffectual.

Respondent San Miguel Corporation is hereby ordered to pay

Complainant separation pay equivalent to her one-month pay per year of
service reckoned from her first day of employment therewith on April
17, 2000 up to the date of this Resolution. Complainants award for full
backwages shall be accordingly adjusted to cover the period from the
time she was ineffectually dismissed on March 13, 2001 up to the date of
this Resolution. As of October 17, 2003 Complainants award for
 separation pay and full backwages already amount to P36,000.00 and
P311,192.31, respectively.

Complainants award for unpaid service incentive leave pay and

13th month pay shall be reduced to P1,514.42 and P7,875.00,
respectively. Her award for attorneys fees shall likewise be accordingly
adjusted to ten percent (10%) of her total monetary award.

Complainants award for holiday pay and moral and exemplary damages
is (sic) hereby deleted.

SO ORDERED.[12]

In a resolution dated February 20, 2004,[13] the NLRC denied the motions for
reconsideration filed by both parties. Thereafter, petitioner and respondent filed
separate petitions with the Court of Appeals.

In CA-G.R. SP No. 84081, the First Division of the Court of Appeals

granted the respondents petition and reinstated with modification the Labor
Arbiters decision finding her to be an illegally dismissed regular employee, but
deleted the award for holiday pay for lack of basis. The appellate court noted that
petitioner gave no satisfactory explanation for the hiring of employees after
respondents termination and the absence of company criteria in determining who
among the employees will be dismissed. The decretal portion thereof, provides:

WHEREFORE, the petition is GRANTED. Accordingly, the

assailed NLRC resolutions, dated December 30, 2003 and February 20,
2004, are hereby REVERSED and SET ASIDE. The June 16, 2003
Decision of the Labor Arbiter is hereby REINSTATED with some
MODIFICATION and should read as follows:

WHEREFORE, judgment is hereby rendered

declaring the dismissal as illegal and ordering her
reinstatement with full backwages, moral and exemplary
damages of P50,000.00 plus 10% attorneys fees, computed
thus:

Backwages:
 2003-6-16
2001-3-17 = P 9,000.00 x 27 months = P 243,000.00
2-2-29

Service Incentive Leave

P 346.15 x 10 days = P 3,461.50
13th month Pay
P 9,000.00 x 27 mos./12 = P 20,250.00
P 266,711.00
SO ORDERED. [14]

In CA-G.R. SP No. 83725, the Third Division of the Court of Appeals dismissed
the companys petition and affirmed the decision of the NLRC, as follows:

WHEREFORE, in consideration of the foregoing, the instant petition is

perforce dismissed. Accordingly, the public respondent NLRCs assailed
resolutions dated 30 December 2003 and 20 February 2004 are
hereby affirmed.

SO ORDERED.[15]

Hence, petitioner instituted these two separate petitions for review praying
that the questioned decisions and resolutions of the Court of Appeals in CA-G.R.
SP No. 84081 and CA-G.R. SP No. 83725 be set aside and that respondents
complaint be dismissed. In a resolution dated August 8, 2005,[16] the Court
consolidated the petitions.

The issues for resolution are: (1) whether or not respondent is a regular
employee of petitioner; and (2) whether or not respondent was illegally dismissed;
and (3) if so, whether or not respondent is entitled to any monetary benefit.

The settled rule is that factual findings of quasi-judicial bodies like the
NLRC, particularly when they coincide with those of the Labor Arbiter are
accorded respect and even finality.[17] This applies with more vigor to the factual
issue of respondents employment status, because the Labor Arbiter, the NLRC and
the two Divisions of the Court of Appeals consistently held that respondent is a
regular employee of petitioner company. Indeed, the records show that their
findings are supported by substantial evidence.
 In termination cases, like the present controversy, the burden of proving the
circumstances that would justify the employees dismissal rests with the employer.
[18]
The best proof that petitioner should have presented to prove the probationary
status of respondent is her employment contract. None, having been presented, the
continuous employment of respondent as an account specialist for almost 11
months, from April 17, 2000 to March 12, 2001, means that she was a regular
employee and not a temporary reliever or a probationary employee. The 2 Payroll
Authorities[19] offered by petitioner showing that respondent was hired as a
replacement, and later, as a probationary employee do not constitute substantial
evidence. As correctly found by the NLRC, none of these documents bear the
conformity of respondent, and are therefore, self-serving.

And while it is true that by way of exception, the period of probationary

employment may exceed six months when the parties so agree, such as when the
same is established by company policy, or when it is required by the nature of the
work,[20] none of these exceptional circumstance were proven in the present case.
Hence, respondent whose employment exceeded six months is undoubtedly a
regular employee of petitioner.

Moreover, even assuming that the employment of respondent from April 7,

2000 to September 3, 2000, is only temporary, and that the reckoning period of her
probationary employment is September 4, 2000, [21] she should still be declared a
regular employee because by the time she was dismissed on March 12, 2001, her
alleged probationary employment already exceeded six months, i.e., six months
and eight days to be precise. Thus, in Cebu Royal Plant v. Deputy Minister of
Labor,[22] a worker was found to be a regular employee notwithstanding the
presentation by the employer of a Payroll Authority indicating that said employee
was hired on probation, since it was shown that he was terminated four days after
the 6th month of his purported probationary employment.

Neither will petitioners belated claim before the Court of Appeals that
respondent became a probationary employee starting October 1, 2000,[23] work
against respondent. As earlier stated, the payroll authorities indicating that
respondents probationary status became effective as of such date are of scant
evidentiary value since it does not show the conformity of respondent. At any rate,
in the interpretation of employment contracts, whether oral or written, all doubts
must be resolved in favor of labor.[24] Hence, the contract of employment in the
instant case, which appears to be an oral agreement since no written form was
presented by petitioner, should be construed as one vesting respondent with a
regular status and security of tenure.

Having ruled that respondent is a regular employee, her termination from

employment must be for a just or authorized cause, otherwise, her dismissal would
be illegal. Petitioner tried to justify the dismissal of respondent under the
authorized cause of redundancy. It thus argued in the alternative that even
assuming that respondent qualified for regular employment, her services still had
to be terminated because there are no more regular positions in the company.
Undoubtedly, petitioner is invoking a redundancy which allegedly resulted in the
termination not only of the trainees, probationers but also of some of its regular
employees.

Redundancy, for purposes of the Labor Code, exists where the services of an
employee are in excess of what is reasonably demanded by the actual requirements
of the enterprise. Succinctly put, a position is redundant where it is superfluous,
and superfluity of a position or positions may be the outcome of a number of
factors, such as overhiring of workers, decreased volume of business, or dropping
of a particular product line or service activity previously manufactured or
undertaken by the enterprise.[25]

In Asufrin, Jr. v. San Miguel Corporation,[26] it was held that the

determination that the employees services are no longer necessary or sustainable
and, therefore, properly terminable is an exercise of business judgment of the
employer. The wisdom or soundness of this judgment is not subject to
discretionary review of the Labor Arbiter and the NLRC, provided there is no
violation of law and no showing that it was prompted by an arbitrary or malicious
act. In other words, it is not enough for a company to merely declare that it has
become overmanned. It must produce adequate proof of such redundancy to justify
the dismissal of the affected employees.

In Panlilio v. NLRC,[27] it was held that the following evidence may be

proffered to substantiate redundancy, to wit:
 the new staffing pattern, feasibility studies/proposal, on the
viability of the newly created positions, job description and the approval
by the management of the restructuring.

In the case at bar, petitioner presented an affidavit of its Sales Manager and a
memorandum of the company both to the effect that there is a need to redeploy its
regular employees and terminate the employment of temporary employees, in view
of an excess in manpower. These documents, however, do not satisfy the
requirement of substantial evidence that a reasonable mind might accept as
adequate to support a conclusion.[28] For one, the other signatories to the
memorandum were not even identified. For another, the said memorandum and
affidavit are self-serving. These documents could have gained greater weight had
petitioner presented its old and new staffing pattern, the newly created and
abolished positions and the documents showing the target business, as well as the
proof showing the failure to attain the same.
Moreover, the lingering doubt as to the existence of redundancy or of
petitioners so called restructuring, realignment or reorganization which resulted in
the dismissal of not only probationary employees but also of regular employees,
[29]
is highlighted by the non-presentation by petitioner of the required notice to the
DOLE and to the separated employees.[30] If there was indeed a valid redundancy
effected by petitioner, these notices and the proof of payment of separation pay to
the dismissed regular employees should have been offered to establish that there
was excess manpower in petitioners GMA-KAG caused by a decline in the sales
volume.

In balancing the interest between labor and capital, the prudent recourse in
termination cases is to safeguard the prized security of tenure of employees and to
require employers to present the best evidence obtainable, especially so because in
most cases, the documents or proof needed to resolve the validity of the
termination, are in the possession of employers. A contrary ruling would encourage
employers to prevent the regularization of an employee by simply invoking a
feigned or unsubstantiated redundancy program.

Granting that petitioner was able to substantiate the validity of its

reorganization or restructuring, it nevertheless, failed to effect a fair and reasonable
criterion in dismissing respondent. The criteria in implementing a redundancy are:
(a) less preferred status, e.g. temporary employee; (b) efficiency; and (c) seniority.
[31]

In dismissing respondent, petitioner averred that in choosing the employee

to be retained and to be placed in the limited available positions, it had to give
priority to the regular employees, over petitioner who is only a probationary
employee. This is clear from the termination letter to respondent, viz:

There were recent developments and initiatives from Management

which have direct implications to the organization of GMA Sales, to wit:

1. The expected business growth for the year 2000 did not
materialize despite the augmentation of our Sales
manpower, reconfiguration, and promotional initiatives
undertaken during the year;

2. There is a need to re-align other SMBD Sales units in order to

further enhance synergy in the sales and distribution of
SMC products;

3. The realignment of these units will result to excess

manpower specifically in GMA Sales. Considering
that these employees are regular, Management will be
constrained to redeploy them to other areas within GMA
Sales;

4. The existing temporary employees will have to be

separated in order to give way to the aforesaid
redeployment.

In view of this Management direction, we regret to inform you

that your probationary employment with the Company will be severed at
the close of business hours of March 12, 2001.

....[32]

It is evident from the foregoing that the criterion allegedly used by petitioner
in reorganizing its sales unit was the employment status of the employee. However,
in the implementation thereof, petitioner erroneously classified respondent as a
probationary employee, resulting in the dismissal of the latter. The instant case is
no different from Asufrin, Jr. v. San Miguel Corporation, where the Court refused
to give credence to the redundancy invoked by the employer inasmuch as the
company adopted no criterion in dismissing the employee. Verily, the absence of
criteria and the erroneous implementation of the criterion selected, both render
invalid the redundancy because both have the ultimate effect of illegally dismissing
an employee.

What further militated against the alleged redundancy advanced by

petitioner is their failure to refute respondents assertion that after her dismissal, it
hired new recruits and re-employed two of her batch mates. Other than the lame
excuse that it is respondent who has the burden of proving the same, it presented
no proof to fortify its denial. Again, petitioner has in its possession the documents
that would disprove the fact of hiring new employees, but instead of presenting
evidence to belie respondents contentions, it refrained from doing so and
conveniently passed the burden to respondent.

In sum, the Court finds that petitioner was not able to discharge the burden
of proving that the dismissal of respondent was valid.

Article 279 of the Labor Code, provides:

ARTICLE 279. Security of tenure. In cases of regular

employment, the employer shall not terminate the services of an
employee except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled
to reinstatement without loss of seniority rights and other privileges and
to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement. (Emphasis, supplied)

Considering that respondent was illegally dismissed, she is entitled not only
to reinstatement but also to payment of full backwages, computed from the time
her compensation was actually withheld from her on March 13, 2001, up to her
actual reinstatement. As a regular employee of petitioner from the date of her
employment on April 17, 2000, she is likewise entitled to other benefits, i.e.,
service incentive leave pay and 13th month pay computed from such date also up to
her actual reinstatement.

Respondent is not, however, entitled to holiday pay because the records

reveal that she is a monthly paid regular employee. Under Section 2, Rule IV, Book
III of the Omnibus Rules Implementing the Labor Code, employees who are
uniformly paid by the month, irrespective of the number of working days therein,
shall be presumed to be paid for all the days in the month whether worked or not.
Hence, the Court of Appeals correctly deleted said award.[33]

Anent attorneys fees, we held in San Miguel Corporation v. Aballa, et al.,

[34]
that in actions for recovery of wages or where an employee was forced to
litigate and thus incurred expenses to protect his rights and interests, a maximum of
10% of the total monetary award by way of attorneys fees is justifiable under
Article 111 of the Labor Code,[35] Section 8, Rule VIII, Book III of its
Implementing Rules,[36] and paragraph 7, Article 2208 of the Civil Code.[37] The
award of attorneys fees is proper and there need not be any showing that the
employer acted maliciously or in bad faith when it withheld the wages. There need
only be a showing that the lawful wages were not paid accordingly, as in the instant
controversy.

Finally, the Court cannot sustain the award of moral and exemplary damages
in favor of respondent. Moral and exemplary damages cannot be justified solely
upon the premise that the employer dismissed his employee without cause or due
process. The termination must be attended with bad faith, or fraud, or was
oppressive to labor or done in a manner contrary to morals, good customs or public
policy and, of course, that social humiliation, wounded feelings, or grave anxiety
resulted therefrom. Similarly, exemplary damages are recoverable only when the
dismissal was effected in a wanton, oppressive or malevolent manner. To merit the
award of these damages, additional facts must be pleaded and proved. [38] In the
present case, respondent did not proffer substantial evidence that would overcome
the legal presumption of good faith on the part of petitioner. The award of moral
and exemplary damages should therefore be deleted.
 WHEREFORE, the petitions are DENIED. The January 7, 2005 Decision
and the June 16, 2005 Resolution of the Court of Appeals in CA-G.R. No. SP No.
83725 which affirmed the December 30, 2003 Resolution of the NLRC in NLRC
NCR CA No. 036413-03 declaring that the dismissal of respondent Caroline C. Del
Rosario, a regular employee of petitioner, was valid but ineffectual; and the
February 23, 2005 Decision and the May 13, 2005 Resolution and of the Court of
Appeals in CA-G.R. No. SP No. 84081 which reinstated with modification the
June 16, 2003 Decision of the Labor Arbiter in NLRC-NCR-00-04495-2002,
holding that respondent is an illegally dismissed regular employee of petitioner,
are AFFIRMED with MODIFICATIONS.

As MODIFIED, the employment status of respondent is declared regular,

and her dismissal from employment, illegal. Petitioner is ordered
to IMMEDIATELY REINSTATE respondent as a regular employee to her
previous position, unless such position no longer exists, in which case she shall be
given a substantially equivalentposition, without loss of seniority rights. Petitioner
is further ORDERED TO PAY respondent backwages, computed from the time
her compensation was actually withheld on March 13, 2001, up to her actual
reinstatement, plus service incentive leave, 13th month pay and attorneys fees
equivalent to 10% of the total monetary award. For this purpose, the case is
ordered REMANDED to the Labor Arbiter for the computation of the amounts
due respondent.

SO ORDERED.

CONSUELO YNARES-SANTIAGO
Associate Justice

WE CONCUR:

HILARIO G. DAVIDE, JR.

Chief Justice
LEONARDO A. QUISUMBING ANTONIO T. CARPIO
Associate Justice Associate Justice

ADOLFO S. AZCUNA
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that
the conclusions in the above Decision were reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.

HILARIO G. DAVIDE, JR.

Chief Justice
 SECOND DIVISION

VETERANS SECURITY AGENCY, INC. G.R. No. 159293

and JESUS R. VARGAS,

P e t i t i o n e r s, Present:

PUNO,

Chairman,

AUSTRIA-MARTINEZ,
- versus -
CALLEJO, SR.,
TINGA, and
CHICO-NAZARIO, JJ.

FELIPE GONZALVO, JR.,

Promulgated:
R e s p o n d e n t.

December 16, 2005

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - -x
 DECISION

CHICO-NAZARIO, J.:

In this petition for review, petitioner VETERANS SECURITY

AGENCY, INC. (VSAI), represented by its Executive Vice-President
and General Manager, JESUS R. VARGAS, challenges the
Decision[1] dated 27 January 2003 of the Court of Appeals in CA-
G.R. SP No. 67043, affirming the Decision of the National Labor
Relations Commission (NLRC). The NLRC reversed the Decision of
the Labor Arbiter and declared respondent to have been illegally
dismissed. VSAI likewise implores this Court to take a look at the
Resolution[2] dated 19 June 2003 of the Court of Appeals denying
their motion for reconsideration.

The evidence shows that VSAI hired respondent as a security

guard, with initial assignment at Overseas Workers Welfare
Administration (OWWA) collection unit at the Philippines Overseas
Employment Agency building in Ortigas, Pasig City from July 1991
to October 1992. His next tour of duty was at the Citytrust Bank
from 20 November 1992 to 31 December 1992. He was then
detailed at the National Power Corporation in Plaridel, Bulacan
from January 1993 to January 1994. In February 1994 to April
1995, he was deployed at the University of Santo Tomas.
 Meanwhile, on 24 April 1995, respondent brought his
complaint against VSAI before the Social Security System (SSS)
for non-remittance of SSS contributions. As a result, petitioners
formally remitted his contributions to the SSS.

In May 1995, respondent was transferred to the OWWAs

main office in Pasig City.

On 26 August 1998, VSAI again failed to remit to the SSS his

contributions and loan payments prompting respondent to file
another complaint against VSAI before the SSS for non-remittance
of contributions and loan payments. As a result, the OWWA
Detachment Commander intimated to respondent that VSAI was
annoyed by the fact that he had commenced the said action
against it.

Thereafter, VSAI hired three (3) additional guards for the

OWWA parking lot located at San Luis Street, Pasay City. In a

meeting sometime in December 1998, OWWAs Chief of

Services and Property Division announced that the lease

contract for said parking lot was to expire on 07 January 1999

and the three newly-hired guards posted there would have to

report to VSAIs office.

 On 30 December 1998, respondent, who was then

manning the OWWA main office, was made to swap postings

with one of these three guards manning the OWWA parking lot.

This came as a surprise to respondent because such swapping

would be to his disadvantage as he would have to give up his

post at the OWWA main office where he was serving for almost

three (3) years to give way to one of the newly-hired security

guards who would soon be displaced from the OWWA parking

lot as a result of the expiration of the lease contract for said

property. Resultantly, on 7 January 1999, upon the expiration of

the lease contract on the parking lot, the services of the guards

temporarily assigned there were withdrawn, including that of

respondent.

The next day, when respondent reported for work at the

OWWA Detachment Commander, he was told that he would

have to be assigned somewhere else because his spouse was

also assigned as a lady guard at the OWWA. This came as an

utter surprise to the respondent who was single at that time.

VSAI informed respondent that his redeployment would be

at the Department of Labor and Employment (DOLE). When

 respondent reported to the DOLE Detachment Commander, he

was required to renew his Barangay, police and National

Bureau of Investigation (NBI) clearances and to undergo

neurological examination. Respondent requested petitioners to

assign him at either the OWWA Office in Intramuros, Manila or

at the OWWA Collection Unit located in Pasig City, so he need

not reapply and renew his employment requirements, but was

denied. From then on, respondent was placed on a floating

status sans pay.

Consequently, on 14 April 1999, respondent filed a complaint

against petitioner VSAI and its President, Alfredo Vargas, Jr., for
overtime pay, premium for holiday and rest day, holiday pay,
service incentive leave pay, thirteenth (13 th) month pay and non-
remittance of SSS contribution starting January 1999.
[3]
Respondent alleged, in his Position Paper, that he was
terminated by VSAI to hit back at him for his filing of two (2)
complaints against the company for non-remittances of his
contributions and loan payments with the SSS. [4]

On 29 September 1999, respondent filed an additional

complaint for illegal dismissal with claims for separation pay and
attorneys fees.[5]

In its Position Paper, VSAI retorted that on 07 January

1999, it received a memorandum from Rafael C. Velez, Officer-

 in-Charge of the Administrative Department of OWWA, stating

that OWWAs lease contract covering the parking area had

expired for which reason the services of the three (3) guards,

including respondent, had to be withdrawn. On 8 January 1999,

respondent was given a posting assignment at the DOLE in lieu

of his OWWA assignment, but was required to undergo an

interview as well as neurological examination before final

posting. Respondent did not report to work thereafter, although

VSAI sent no less than three (3) memoranda for him to report

for work. In its Position Paper, VSAI averred that it would submit

copies of the payrolls for the pertinent periods to the Labor

Arbiter to show that respondent had been paid in accordance

with existing labor laws. However, these were never submitted.

On 08 February 2000, the Labor Arbiter dismissed the

complaint for lack of merit. The NLRC reversed the decision of the
Labor Arbiter in a Decision dated 24 April 2001, with the
following fallo:

WHEREFORE, the assailed decision is hereby

REVERSED and SET ASIDE and a new one entered declaring
complainant-appellants dismissal as illegal and ordering
respondent-appellee to pay him his separation pays
equivalent to one-month salary per year of service and his
money claims of night shift differential pay, service
incentive leave, legal holiday pay, overtime pay, computed
three years backward, as follows:
 1.) Separation
P198 x 26 days x 7 yrs. P36,036.00

2.) Salary differential from Jan. 8, 1996 to Jan. 8, 1999 = 3 yrs.

- From Jan. 8, 1996 to Feb.1, 1996 = 76 mos.

P8,335.05- 4,350 (P145.00 x 30 days) = P3,985.05 x .70 mos. P 3,028.64
-From Feb.2, 1996 to Apr. 30, 1996 = 3 mos.
P9,254.76 4,830 (161.00 x 30 days) = P4,424.76 x 3 mos. 13,274.28

-May 1, 1996 to Feb. 5, 1997 = 9.2 mos

P9,484.71 4,950 (165.00 x 30 days) = P4,946.95 x 2.8 mos. 41,719.33

-Feb.6, 1997 to April 30, 1997 = 2.8 mos

P10,346.95 5,400 (180.00 x 30 days) = P4,946.95 x 2.8 mos. 13,851.46

-May 1, 1997 to Feb. 5, 1998 = 9.2 mos

P10,634.375,550 (180.00 x 30 days)= P4,946.95 x 2.8 mos. 46,776.20

-Feb. 6, 1998 to Jan. 8,1999 = 11.06 mos

P11,381.655,940 (P198.00 x 30 days)= P5,441.65 x 11.06 mos. 60,184.65

Total P178,834.56.

GRAND TOTAL P214,870.56[6]

 On 27 January 2003, the Court of Appeals affirmed the ruling
of the NLRC. VSAIs motion for reconsideration was denied by the
Court of Appeals in the Resolution[7] of 19 June 2003.

Hard done by the said ruling, petitioner now comes to this

Court as a final recourse via the instant appeal assailing the
Decision and Resolution of the Court of Appeals on the following
assignment of errors:

I. THE HONORABLE COURT OF APPEALS

COMMITTED SERIOUS AND REVERSIBLE ERROR WHEN
IT HELD THAT THE RESPONDENT WAS ILLEGALLY
DISMISSED DESPITE A JUDICIAL ADMISSION BY
RESPONDENT THAT HE WAS OFFERED SENTINEL DUTY
IMMEDIATELY AFTER HIS RECALL FROM HIS POSTING
ASSIGNMENT AT THE PREMISES OF OVERSEAS
WORKERS WELFARE ADMINISTRATION, (OWWA).

II. THE HONORABLE COURT OF APPEALS COMMITTED

SERIOUS AND REVERSIBLE ERROR WHEN IT
SUSTAINED THE AWARD BY THE NATIONAL LABOR
RELATIONS COMMISSION (NLRC), OF OVERTIME PAY TO
THE RESPONDENT DESPITE A FINDING BY THE NLRC
THAT THERE WAS NO IOTA OF EVIDENCE TO SATISFY
THE BURDEN OF PROOF REQUIRED TO SUPPORT THE
MONEY CLAIM.[8]

The issue of whether or not respondent was constructively

dismissed is the bedrock of the petition. Related to this is the
issue of whether or not respondent had abandoned his job.
 VSAI ardently claims that there was no dismissal,
constructive or otherwise. VSAI claims that respondent
abandoned his post and went on Absence Without Leave. The
evidence, however, points to a different direction.

Constructive dismissal exist when an act of clear

discrimination, insensibility or disdain on the part of the employer
has become so unbearable as to leave an employee with no
choice but to forego continued employment. [9] On the other hand,
abandonment, as a just and valid cause for termination, requires
a deliberate and unjustified refusal of an employee to resume his
work, coupled with a clear absence of any intention of returning to
his or her work. Abandonment is incompatible with constructive
dismissal.[10]

We find the absence of abandonment, in this case, as there

was no deliberate intent on the part of the respondent to abandon
his employment with VSAI. A strong indication of the intention of
respondent to resume work is that on several dates, after his last
assignment on January 1999, he reported to the VSAIs office
regularly for reassignment, but was not given any. He then lost no
time in filing the illegal dismissal case. An employee who
forthwith takes steps to protest his layoff cannot by any stretch of
imagination be said to have abandoned his work and the filing of
the complaint is proof enough og his desire to return to work, thus
negating any suggestion of abandonment. [11]Significantly,
respondent, in his position paper,[12] prayed for a regular
assignment or in the alternative VSAI should be ordered to pay
salaries until the time he is gainfully employed. Respondents
entreaty to be given a regular posting is antithetical to a charge
of abandonment.

Moreover, the burden of proving that respondent has

abandoned his job rests with VSAI. However, VSAI failed miserably
to discharge the burden. VSAI adduced in evidence three memos
allegedly sent via registered mail to respondent, but as the NLRC
and the Court of Appeals ruled, the evidentiary value of these
documents is of dubious authenticity as the memos had not been
properly identified and were only attached belatedly to the
petition.[13] Moreover, we note that there was no registry return
card for these memos so there is no way of telling who received
these memos, if they were received at all by respondent. What is
more, the three memos appear to be exact copies of each other
except for the signatories and the dates and the way the
addressees were written. The three memos commonly stated, viz:

Re: Directive To Report to VSAI

Operations Center For
Re-Assignment

Pursuant to the Standing Policy of our Agency to give

priority assignment to security guards who have been
relieved from their post of assignment and who are on a
floating status, you are hereby directed to report soonest to
the VSAI Personnel Office at the above address for re-
assignment.
 Failure to comply will be tantamount to your non-
interest for re-assignment and will constitute a waiver on
your part of your rights under the circumstances.

Please acknowledge receipt hereof by affixing your

signature over your printed name on the space provided
hereunder.[14] (Emphasis supplied.)

This similarity in form and substance of the memos

engenders the impression that they were just pro-forma letters
aimed at making it appear that VSAI have not dismissed
respondent and that on three occasions it had asked respondent
to report for work, but which notices the latter refused to heed.
Further, it baffles the Court that the second memorandum did not
mention about the previous memorandum sent to respondent.
Neither did the third memorandum mention anything about the
two previous memos.

We find it equally implausible that none of the 3 memos

touched on respondents alleged refusal to accept the posts
assigned to him and the abandonment of his posts considering
that such acts constitute willful disobedience and gross neglect of
duty which are valid grounds for dismissal. [15]

VSAI capitalized on the fact that on 7 January 1999, it

received a memorandum from the Officer-in-Charge of the

Administrative Department of OWWA, informing that OWWAs

lease contract covering the parking area had expired for which

reason the services of the three (3) guards, including

respondent, had to be withdrawn. The uncontroverted fact,

however, is that respondent was already previously regularly

detailed at the OWWA main office, but he was uprooted from

this assignment and was tossed at the OWWA parking lot in

Pasay City with the knowledge that the security services in that
area would soon expire, as a consequence of which he would

have to be reassigned somewhere else. As the facts stand,

reassignment to a new client, in this case, necessitates a

renewal of Barangay clearance, training certificate,

neurological test, and ultimately passing the interview by the

client. In effect, he would reapply with the next client of VSAI,

which is the DOLE, and in the process of application, be on

floating status without pay, with no assurance of acceptance

despite securing the said documents as he would still have to

undergo the rigors of an interview. Indeed, respondent was

then left uncertain as to when and where his next assignment

would be.

There is likewise something devious with the fact that a

new recruit replaced respondent from his previous posting at

OWWA main office relegating respondent to a short-lived

 posting at the OWWA Pasay City parking lot that would soon

fold-up.

VSAI further contends that respondent was only provisionally

relieved from his last post and not dismissed from employment.
Hence, the filing of the illegal dismissal case in April 1999 was
premature. If at all, it is argued that respondent should be
considered on temporary off-detail status.

In Superstar Security Agency, Inc. vs. NLRC,[16] we held that

placing an employee on temporary off-detail is not equivalent to
dismissal provided that such temporary inactivity should continue
only for a period of six (6) months. Otherwise, the security agency
concerned could be held liable for constructive dismissal under
Article 286 of the Labor Code which reads:

Art. 286. When employment not deemed

terminated.The bona fide suspension of the operation of a
business or undertaking for a period not exceeding six (6)
months, or the fulfillment by the employee of a military or
civic duty shall not terminate employment. In all such cases,
the employer shall reinstate the employee to his former
position without loss of seniority rights if he indicates his
desire to resume his work not later than one (1) month from
the resumption of operations of his employer or from his
relief from the military or civic duty. (Emphasis supplied.)
 Article 286 applies only when there is a bona fide suspension
of the employers operation of a business or undertaking for a
period not exceeding six (6) months. In security agency parlance,
being placed off detail or on floating status means waiting to be
posted.[17] Here, prior to his tour of duty in Pasay City, respondent
had a regular posting, but he was dislodged by a newly-hired
security guard and respondent had to be assigned to a client
whose service contract was to end. Thus, there was no
suspension of operation, business or undertaking, bona fide or
not, that would have justified placing the respondent off-detail
and making him wait for a period of more than six months. [18] In
the same vein, the records are shorn of any indication that
respondent had to be placed on temporary off-detail for lack of
available post. VSAI just stopped giving respondent his
assignment after his duty at the OWWA Parking Lot in Pasay City.

True, it is the inherent prerogative of an employer to transfer

and reassign its employees to meet the requirements of its
business. Be that as it may, the prerogative of the management
to transfer its employees must be exercised without grave abuse
of discretion. The exercise of the prerogative should not defeat an
employee's right to security of tenure. The employers privilege to
transfer its employees to different workstations cannot be used as
a subterfuge to rid itself of an undesirable worker. [19]

Here, riled by respondents consecutive filing of complaint

against it for nonpayment of SSS contributions, VSAI had been
tossing respondent to different stations thereafter. From his
assignment at University of Santo Tomas for almost a year, he
was assigned at the OWWA main Office in Pasig where he served
for more than three years. After three years at the OWWA main
office, he was transferred to the OWWA Pasay City parking lot
knowing that the security services will end forthwith. VSAI even
concocted the reason that he had to be assigned somewhere
because his spouse was already a lady guard assigned at the
OWWA main office. Inasmuch as respondent was single at that
time, this was obviously a mere faade to rid of respondent who
was no longer in VSAIs good graces.

The only logical conclusion from the foregoing discussion is

that the VSAI constructively dismissed the respondent. This ruling
is in rhyme with the findings of the Court of Appeals and the
NLRC. Dismissal is the ultimate penalty that can be meted to an
employee. Inasmuch as petitioners failed to adduce clear and
convincing evidence to support the legality of respondents
dismissal, the latter is entitled to reinstatement and back wages
as a necessary consequence. However, reinstatement is no longer
feasible in this case because of the palpable strained relations,
thus, separation pay is awarded in lieu of reinstatement. [20]

Anent monetary claims, VSAI ardently argues that such

demands must be denied for failure of respondent to adduce
evidence thereon. Such logic could not withstand judicial muster.

On this, the Court could not be any clearer in Mayon Hotel &
Restaurant vs. Rolando Adana, et al,[21] when we held that
inasmuch as respondents therein have set out with particularity in
their complaint, position paper, affidavits and other documents
the labor standard benefits they are entitled to, and which they
alleged that petitioners therein have failed to pay them, it
became incumbent upon the employers to prove that they have
paid these money claims. This is in tune with the general precept
that: one who pleads payment has the burden of proving it, and
even where the employees must allege nonpayment, the general
rule is that the burden rests on the defendant to prove
nonpayment, rather than on the plaintiff to prove non payment.
[22]
The reason for the rule is that the pertinent personnel files,
payrolls, records, remittances and other similar documents which
will show that overtime, differentials, service incentive leave and
other claims of workers have been paid are not in the possession
of the worker but in the custody and absolute control of the
employer.[23]

In the case at bar, VSAI failed to discharge the burden of

proof by choosing not to fully and completely disclose information
and present the necessary documents to prove payment of labor
standard benefits due to respondent. Despite repeated
promises, i.e., in its five-paged Position Paper [24] or in its two-
paged Reply,[25] that it will proffer in evidence the payrolls which it
admitted are the best evidence to resolve the monetary claims of
respondent, VSAI failed to submit the pertinent employee files,
which would show that respondent rendered work entitling him to
payment for overtime work, night shift differential, service
incentive leave, and premium pay for work on holidays and rest
day. Indeed, VSAIs failure to submit the necessary documents
documents which are not in respondents possession but in the
custody and absolute control of VSAI in spite of its previous
undertaking to do so, gives rise to the presumption that their
presentation is prejudicial to its cause. [26] Consequently, it failed
to discharge the onus prabandi thereby making it liable for such
claims to respondent.[27]

In sum, respondent having been illegally dismissed, he is

entitled to separation pay and salary differentials as awarded by
the NLRC whose computations the Court defers to, it being a
matter failing within its expertise. [28]

One final note. The cavalier fashion by which the Labor

Arbiter dealt with this case must not go unnoticed. The Decision,
in its totality, was merely two pages and the rationale for the
denial of respondents claims was sketchily couched in this lone
paragraph, to wit:

This Office is inclined to uphold the position of the

respondents. Indeed, payrolls of service contractors which
are performing specific work for a government office are
being scrutinized by the auditors of the Commission on
Audit. These auditors will not allow the payment of the
billings of the service contractors unless there is sufficient
showing that the employees of the service contractors are
paid in accordance with laws.[29]

There is absolutely no evidence on record to support the

above-quoted pronouncement of the Labor Arbiter. In the ordinary
course of things, it is far-fetched that COA auditors would
investigate if the employees of the service contractors of
government offices are properly paid. The vinculum that binds the
government offices to the contractors is the contract of service.
Thus, the COA auditors are normally limited to ascertaining if the
payments made by the government agencies are in accordance
with the service contracts and if they are properly documented
with billings and receipts of payments. Ceteris paribus, other
things considered equal, COA auditors are not tasked to look into
the payrolls of the service contractors to make sure that their
employees are properly compensated in allowing or disallowing
the payment of service contractors.

It was, therefore, sheer whim on the part of the Labor

Arbiter to dismiss the claims of respondent on the basis of a

mere presumption without stating its legal basis.

With unfading fervor, the Court again strikes a chord

among the quasi-judicial agencies to shun from treating labor

cases flippantly. In the avuncular case of San Jose v. NLRC,

[30]
the Court smote hard blows on the Labor Arbiter therein for

his slapdash manner of deciding a case, viz:

Labor Arbiters should exert all efforts to cite statutory

provisions and/or judicial decision to buttress their
dispositions. An Arbiter cannot rely on simplistic statements,
generalizations, and assumptions. These are not substitutes
for reasoned judgment. Had the Labor Arbiter exerted more
research efforts, support for the Decision could have been
found in pertinent provisions of the Labor Code, its
 Implementing Rules, and germane decisions of the Supreme
Court.[31]

Indeed, not only do the claims of employees boil down to

the lucre of wages, separation pay, etc., although these are the

lifeblood of a minimum wage earner such as the respondent

herein. Perhaps more importantly, at stake is a workingmans

years of sweat and toil. Here, respondent had rendered nine (9)

years of unsullied hard work, but his reward came in a long-

drawn-out floating status without pay to chastise him for

lodging a legitimate grievance against VSAI for non-remittance

of SSS payments.

Indeed, the Court ought to deny this petition lest the wheels
of justice for aggrieved workingmen grind to a halt. We ought to
abate the culture of employers bestowing security of tenure to
employees, not on the basis of the latters performance on the job,
but on their ability to toe the line set by their employer and
endure in silence the flagrant incursion of their rights, zealously
protected by our labor laws and by the Constitution, no less.

WHEREFORE, the present petition is hereby DENIED.

Accordingly, the Decision and the Resolution dated 27 January
2003 and 19 June 2003, of the Court of Appeals in CA-G.R. SP No.
67043, are hereby AFFIRMED.
 Costs against petitioners.

SO ORDERED.

MINITA V. CHICO-NAZARIO

Associate Justice

WE CONCUR:

REYNATO S. PUNO
Associate Justice
Chairman
 ROMEO J. CALLEJO,
MA. ALICIA AUSTRIA-MARTINEZ SR.

Associate Justice Associate Justice

DANTE O. TINGA

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached

in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

REYNATO S. PUNO
 Associate Justice
Chairman, Second Division

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, and the

Division Chairmans Attestation, it is hereby certified that the
conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the
Courts Division.

HILARIO G. DAVIDE, JR.

Chief Justice
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. Nos. 146653-54 February 20, 2006

WESTMONT PHARMACEUTICALS, INC., UNITED LABORATORIES, INC., and/or JOSE YAO

CAMPOS, CARLOS EJERCITO, ERNESTO SALAZAR, ELIEZER SALAZAR, JOSE SOLIDUM,
JR., Petitioners,
vs.
RICARDO C. SAMANIEGO, Respondent.

x---------------x

G.R. Nos. 147407-08 February 20, 2006

RICARDO C. SAMANIEGO, Petitioner,

vs.
WESTMONT PHARMACEUTICALS, INC. and UNITED LABORATORIES, INC., Respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:

Before us are consolidated petitions for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, filed by both contending parties assailing the Decision 1 dated January 8,
2001 and the Resolution2dated March 9, 2001 rendered by the Court of Appeals in CA-G.R. SP No.
60400.

The factual antecedents as borne by the records are:

On May 5, 1998, Ricardo C. Samaniego filed with the Office of the Labor Arbiter, Regional Arbitration
Branch (RAB) No. II, Tuguegarao City, Cagayan, a complaint for illegal dismissal and damages
against Westmont Pharmaceuticals, Inc. (Westmont) and United Laboratories, Inc. (Unilab), herein
Respondents. Also impleaded as respondents are Unilabs officers, Jose Yao Campos, Carlos
Ejercito, Ernesto Salazar, Eliezer Salazar, and Jose Solidum, Jr.

The complaint alleges that Unilab initially hired Samaniego as Professional Service Representative
of its marketing arm, Westmont. Later, Unilab promoted him as Senior Business Development
Associate and assigned him in Isabela as Acting District Manager of Westmont and Chairman of
Unilab Special Projects. In August 1995, he was transferred to Metro Manila pending investigation of
his subordinate and physicians of Region II involved in a sales discount and Rx trade-off
controversy. He was then placed under "floating status" and assigned to perform duties not
connected with his position, like fetching at the airport physicians coming from the provinces; making
deposits in banks; fetching field men and doing messengerial works. His transfer to Metro Manila
resulted in the diminution of his salary as his per diem was reduced from P13,194.00 to P2,299.00
only.

On June 26, 1998, Westmont and Unilab filed a motion to dismiss Samaniegos complaint on the
ground of improper venue and lack of cause of action. They argued that the complaint should have
been filed with the National Labor Relations Commission (NLRC) in Manila, not with the Office of the
Labor Arbiter in Tuguegarao City, Cagayan; and that the action should only be against Westmont,
Samaniegos employer.

Samaniego filed an Opposition to the motion to which Westmont and Unilab filed a Reply.

On August 13, 1998, the Labor Arbiter denied the motion to dismiss, citing Section 1, Rule IV of the
NLRC New Rules of Procedure. This provision allows the Labor Arbiter to order a change of venue in
meritorious cases.

The Labor Arbiter then set the case for preliminary conference during which Westmont and Unilab
expressly reserved their right to contest the order denying their motion to dismiss.

On September 3, 1998, Westmont and Unilab filed with the NLRC an Urgent Petition to Change or
Transfer Venue. On the same date, they filed with the Office of the Labor Arbiter in Cagayan a
Motion to Suspend Proceedings in view of the pendency of their petition for change or transfer of
venue in the NLRC.

On September 8, 1998, the Labor Arbiter issued an Order directing the parties to submit their
respective position papers and supporting documents within twenty (20) days from notice, after
which the case shall be deemed submitted for decision.

On September 22, 1998, the NLRC, acting on the petition to change venue, directed the Labor
Arbiter to forward to the NLRC the records of the case. The Labor Arbiter retained the complete
duplicate original copies of the records and set the case for hearing. Westmont and Unilab
repeatedly filed motions for cancellation of the scheduled dates of hearing on the ground that their
petition for change of venue has remained unresolved. They did not file their position papers nor did
they attend the hearing. Thus, the Labor Arbiter considered the case submitted for Decision based
on the records and the evidence submitted by Samaniego.

On December 16, 1998, the Labor Arbiter rendered a Decision finding that Samaniego was "illegally
and unjustly dismissed constructively" and ordering his reinstatement to his former position without
loss of seniority rights and privileges; and payment of his full backwages from the date of his
dismissal from the service up to the date of his actual reinstatement, as well as per diem differential,
profit share, and actual, moral and exemplary damages, plus 10% attorneys fees.

On January 21, 1999, Westmont and Unilab interposed an appeal to the NLRC. In its Resolution
dated August 31, 1999, the NLRC dismissed the petition for change of venue, holding that when the
cause of action arose, Samaniegos workplace was in Isabela over which the Labor Arbiter in
Cagayan has jurisdiction; and that the Labor Arbiters Decision is not appealable.

In the same Resolution, the NLRC declared the Labor Arbiters Decision null and void, finding that:
x x x the Executive Labor Arbiter below only allowed the transmittal of the official records of the
instant case to the Commission. Throwing caution into the wind, he retained complete duplicate
original copies of the same, conducted further proceedings and rendered his now contested
Decision despite the pendency of the appeal-treated Urgent Petition for Change of Venue.

As a consequence, respondents-appellants were deprived of their opportunity to be heard and

defend themselves on the issues raised in the instant case. They were therefore denied of their right
to due process of law in violation of Section 1, Article III of the Constitution which provides: "No
person shall be deprived of his....property without due process of law."

The dispositive portion of the NLRC Resolution reads:

WHEREFORE, premises considered, the main Appeal and Motion to Quash are hereby PARTIALLY
GRANTED and the appeal-treated Petition for Change of Venue DISMISSED for lack of jurisdiction
and/or merit. Accordingly, the Decision appealed from is declared NULL and VOID and the Order
appealed from SUSTAINED insofar as the denial of the Motion to Dismiss is concerned. The entire
records of the instant case are DIRECTED to be immediately remanded to the Executive Labor
Arbiter of origin for immediate conduct of further proceeding. The respondents-appellants are
DIRECTED to pay complainant-appellee the amount of Two Hundred Thirty Thousand Seven
Hundred Twenty Pesos and Thirty Centavos (P230,720.30) representing his salary from January 1,
1999 to August 31, 1999, the date of issuance of this Resolution less any salary collected by him by
way of execution pending appeal.

SO ORDERED.

The parties separately filed their motions for reconsideration but were both denied by the NLRC in its
Resolution dated June 27, 2000.

On January 8, 2001, the Court of Appeals, acting on the parties petitions for certiorari, rendered its
Decision setting aside the NLRC Resolutions and affirming with modification the Labor Arbiters
Decision in the sense that the award of moral damages was reduced from P5,000,000.00
to P500,000.00; and the exemplary damages from P1,000,000.00 to P300,000.00, thus:

xxx

While this Court concurs with the ruling of the Executive Labor Arbiter that there was constructive
dismissal committed against Ricardo Samaniego, this Court finds the award on moral and exemplary
damages unconscionable.

xxx

WHEREFORE, the NLRCs resolutions dated August 31, 1999 and June 27, 2000 are hereby SET
ASIDE. The decision of the Executive Labor Arbiter dated December 16, 1998 is REINSTATED and
AFFIRMED in all respect except with the following modification: the moral and exemplary damages
are reduced to P500,000.00 and P300,000.00, respectively.

SO ORDERED.

Hence, these consolidated petitions for review on certiorari filed by the opposing parties.
In their petition, Westmont and Unilab allege that the Court of Appeals erred in denying their motion
to dismiss by reason of improper venue and in sustaining the Labor Arbiters Decision declaring that
Samaniego was constructively dismissed; and that they were denied due process.

For his part, Samaniego maintains that the Court of Appeals did not err in its ruling. However, he
claims that the Appellate Court should not have reduced the Labor Arbiters award for moral and
exemplary damages.

The petition to change or transfer venue filed by Westmont and Unilab with the NLRC is not the
proper remedy to assail the Labor Arbiters Order denying their motion to dismiss. Such Order is
merely interlocutory, hence, not appealable. Section 3, Rule V of the Rules of Procedure of the
NLRC, as amended, provides:

SECTION 3. Motion to Dismiss. On or before the date set for the conference, the respondent may
file a motion to dismiss. Any motion to dismiss on the ground of lack of jurisdiction, improper
venue, or that the cause of action is barred by prior judgment, prescription or forum shopping, shall
be immediately resolved by the Labor Arbiter by a written order. An order denying the motion
to dismiss or suspending its resolution until the final determination of the case is not appealable.

In Indiana Aerospace University v. Commission on Higher Education,3 we held:

An order denying a motion to dismiss is interlocutory, and so the proper remedy in such a case is
to appeal after a decision has been rendered.

Assuming that the petition to change or transfer venue is the proper remedy, still we find that the
Court of Appeals did not err in sustaining the Labor Arbiters Order denying the motion to dismiss.

Section 1(a), Rule IV of the NLRC Rules of Procedure, as amended, provides: 1avvphil.net

SECTION 1. Venue. (a) All cases which Labor Arbiters have authority to hear and decide may be
filed in the Regional Arbitration Branch having jurisdiction over the workplace of the
complainant/petitioner.

For purposes of venue, workplace shall be understood as the place or locality where the employee is
regularly assigned when the cause of action arose. It shall include the place where the employee
is supposed to report back after a temporary detail, assignment or travel. In the case of field
employees, as well as ambulant or itinerant workers, their workplace is where they are regularly
assigned, or where they are supposed to regularly receive their salaries/wages or work instructions
from and report the results of their assignment to, their employers.

In Sulpicio Lines, Inc. v. NLRC,4 we held:

The question of venue essentially relates to the trial and touches more upon the convenience of the
parties, rather than upon the substance and merits of the case. Our permissive rules underlying
provisions on venue are intended to assure convenience for the plaintiff and his witnesses and to
promote the ends of justice. This axiom all the more finds applicability in cases involving labor and
management because of the principle, paramount in our jurisdiction, that the State shall afford full
protection to labor.

xxx
This provision is obviously permissive, for the said section uses the word "may," allowing a different
venue when the interests of substantial justice demand a different one. In any case, as stated earlier,
the Constitutional protection accorded to labor is a paramount and compelling factor, provided the
venue chosen is not altogether oppressive to the employer.

Here, it is undisputed that Samaniegos regular place of assignment was in Isabela when he was
transferred to Metro Manila or when the cause of action arose. Clearly, the Appellate Court was
correct in affirming the Labor Arbiters finding that the proper venue is in the RAB No. II at
Tuguegarao City, Cagayan.

On the contention of Westmont and Unilab that they were denied due process, well settled is the rule
that the essence of due process is simply an opportunity to be heard or, as applied to
administrative proceedings, an opportunity to explain ones side or an opportunity to seek a
reconsideration of the action or ruling complained of. The requirement of due process in labor cases
before a Labor Arbiter is satisfied when the parties are given the opportunity to submit their
position papers to which they are supposed to attach all the supporting documents or
documentary evidence that would prove their respective claims, in the event the Labor Arbiter
determines that no formal hearing would be conducted or that such hearing was not necessary.5

As shown by the records, the Labor Arbiter gave Westmont and Unilab, not only once, but thrice, the
opportunity to submit their position papers and supporting affidavits and documents. But they were
obstinate. Clearly, they were not denied their right to due process.

The ultimate issue for our resolution is whether the Court of Appeals erred in holding that Samaniego
was constructively dismissed by Westmont and Unilab.

To recapitulate, Samaniego claims that upon his reassignment and/or transfer to Metro Manila, he
was placed on "floating status" and directed to perform functions not related to his position. For their
part, Westmont and Unilab explain that his transfer is based on a sound business judgment, a
management prerogative.

In constructive dismissal, the employer has the burden of proving that the transfer of an employee is
for just and valid grounds, such as genuine business necessity. The employer must be able to show
that the transfer is not unreasonable, inconvenient, or prejudicial to the employee. It must not involve
a demotion in rank or a diminution of salary and other benefits. If the employer cannot overcome this
burden of proof, the employees transfer shall be tantamount to unlawful constructive dismissal. 6

Westmont and Unilab failed to discharge this burden. Samaniego was unceremoniously transferred
from Isabela to Metro Manila. We hold that such transfer is economically and emotionally
burdensome on his part. He was constrained to maintain two residences one for himself in Metro
Manila, and the other for his family in Tuguegarao City, Cagayan. Worse, immediately after his
transfer to Metro Manila, he was placed "on floating status" and was demoted in rank, performing
functions no longer supervisory in nature.

There may also be constructive dismissal if an act of clear insensibility or disdain by an employer
becomes so unbearable on the part of the employee that it could foreclose any choice by him except
to forego his continued employment.7 This was what happened to Samaniego. Thus, he is entitled to
reinstatement without loss of seniority rights, full backwages, inclusive of allowances, and other
benefits or their monetary equivalent, computed from the time his compensation was withheld
from him up to the time of his actual reinstatement.8
However, the circumstances obtaining in this case do not warrant the reinstatement of Samaniego.
Antagonism caused a severe strain in the relationship between him and his employer. A more
equitable disposition would be an award of separation pay equivalent to at least one month pay, or
one month pay for every year of service, whichever is higher (with a fraction of at least six [6 months
being considered as one [1 whole year),9 in addition to his full backwages, allowances and other
benefits.10

Records show that Samaniego was employed from October 1982 to May 27, 1998, 11 or for sixteen
(16) years and seven (7) months, with a monthly salary of P25,000.00. Hence, he is entitled to a
separation pay of P425,000.00.

WHEREFORE, the assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No.
60400 and CA-G.R. SP No. 60478 are AFFIRMED, with MODIFICATION in the sense that
Westmont and Unilab are ordered to pay Samaniego his separation pay equivalent to P425,000.00,
plus his full backwages, and other privileges and benefits, or their monetary equivalent, from the
time of his dismissal up to his supposed actual reinstatement. The award for moral and exemplary
damages is deleted.

Costs against Westmont and Unilab.

SO ORDERED.

ANGELINA SANDOVAL-GUTIERREZ
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Associate Justice
Chairperson

(On leave)
RENATO C. CORONA* ADOLFO S. AZCUNA
Associate Justice Asscociate Justice

CANCIO C. GARCIA
Associate Justice

ATT E S TATI O N

I attest that the conclusions in the above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Court's Division.

REYNATO S. PUNO
Associate Justice
Chairperson, Second Division

C E R TI F I C ATI O N
Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairman's Attestation, it is
hereby certified that the conclusions in the above Decision were reached in consultation before the
case was assigned to the writer of the opinion of the Court.

ARTEMIO V. PANGANIBAN
Chief Justice

Republic of the Philippines

Supreme Court
Manila

FIRST DIVISION

EDNA ABAD, G.R. No. 141371

JOSEPH MARTINEZ and
ELISEO ESCANILLAS, JR., Present:
Petitioners,
PANGANIBAN, CJ., Chairperson,
YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
CALLEJO, SR., and
CHICO-NAZARIO, JJ.
ROSELLE CINEMA, SILVER
SCREEN CORPORATION Promulgated:
and
VERMY TRINIDAD,
Respondents. March 24, 2006
x------------------------------------------------
x

DECISION

AUSTRIA-MARTINEZ, J.:

Edna Abad, Joseph Martinez and Eliseo Escanillas, Jr. (petitioners)

filed the present petition for review assailing the
Decision[1] dated September 30, 1999 and Resolution
dated December 10, 1999, issued by the Court of Appeals (CA) in
CA-G.R. SP No. 53246.

This case originated from individual complaints filed by petitioners

against Roselle Cinema, Silver Screen Corporation
and Vermy Trinidad (respondents) for illegal dismissal,
underpayment, non-payment of overtime pay, premium for
holiday, premium pay for rest day, holiday pay, service incentive
leave, night shift differentials, separation pay, damages, and
attorneys fees. These complaints were later consolidated.
 In a Decision dated April 17, 1998, the Labor Arbiter (LA) of
the National Labor Relations Commission (NLRC) in Iloilo City ruled
that petitioners were not illegally dismissed. The LA dismissed
petitioners complaints primarily on the ground that petitioners
failed to substantiate their claims, as they have only their bare
allegations to support it and no corroborative evidence to refute
respondents substantial evidence showing that they voluntarily
terminated their relationship with respondents. The LA also
denied their money claims because their allegations were belied
by documentary evidence showing that these claims have been
properly paid to petitioners.[2]

On appeal, the NLRC reversed the LA in its Decision dated December 24,
1998, declaring that petitioners were illegally dismissed and ordering respondents
to pay the moneys claimed by petitioners. The dispositive portion of the NLRC
Decision reads:

WHEREFORE, premises considered, the decision appealed from

rendered on April 17, 1998, is hereby REVERSED AND SET ASIDE
and a new one entered ordering respondents, Roselle Cinema and/or
Silver Screen Corporation, to pay complainants the following:

a) Edna Abad, the amount of P107,318.00

b) Joseph Martinez, the amount of P97,586.38

c) Eliseo Escanillas, Jr. the amount of P102,074.60

P306,978.98
 and 10% attorneys fees 30,697.90

GRAND TOTAL P337,676.88

vvvvvvvvvv

All other claims are hereby dismissed for lack of merit.

SO ORDERED.[3]

The NLRCs main reasons for reversing the LAs Decision were due
to the fact that respondents failed to adduce clear and convincing
evidence to support their defense, and that petitioners filing of a
case for illegal dismissal negated respondents defense that
petitioners abandoned their work.[4] Consequently, the NLRC
ordered the award of separation pay and other monetary claims
in favor of petitioners.[5]

Respondents motion for reconsideration was denied by the NLRC

in its Resolution dated April 16, 1999.[6]

Thereafter, respondents filed a special civil action

for certiorari with the CA which, in its assailed Decision
dated September 30, 1999, reversed the NLRC Decision and
reinstated the LA Decision, dismissing the complaint of
petitioners.
The CA sustained the LAs findings that there was no illegal
dismissal, as petitioners voluntarily left their jobs, and that their
money claims were not supported by evidence. The CA stated
that the NLRC should not have dealt with the issue of
abandonment since respondents did not raise this as a defense. [7]

Petitioners sought reconsideration, but the CA denied the motion

in its assailed Resolution dated December 10, 1999.[8]

Hence, the present petition for review.

Petitioners argue that if the issue in this case is the illegality of

their dismissal, then why should the CA conclude that the decision
of the NLRC was not supported by evidence adduced and the
applicable law and jurisprudence (page 5), when in such a
situation it is the respondents that would adduce evidence.
[9]
Petitioners further argue that the award of wage differentials
were obliterated in the decision of the CA without expressing
therein clearly and distinctly the law on which it is based.
[10]
Lastly, petitioners insist that the CA should have dismissed the
petition before it because it was filed late on June 16, 1999, the
NLRC decision having been received by respondents on February
10, 1999, and their motion for reconsideration being pro forma,
the last day to file the petition was on April 12, 1999.[11]

On the other hand, respondents contend that petitioners were not dismissed
from work; they voluntarily left their jobs without notice. According to
respondents, petitioner Escanillas last reported for work on January 5, 1997;
petitioner Martinez on January 15, 1997; and petitioner Abad on January 31,
1997. They take exception to the NLRCs finding that they failed to substantiate
their allegation that petitioners abandoned their jobs, and insist that they did not
raise such ground as a defense.

As a rule, the Court refrains from reviewing factual assessments of lower

courts and agencies exercising adjudicative functions, as petitions
for certiorari under Rule 65 involve only jurisdictional issues, or grave abuse of
discretion amounting to lack or excess of jurisdiction.[12] However, when the NLRC
and the Labor Arbiter have come up with differing opinions, the Court is
constrained to review the evidence on record,[13] as in the present case.

The petition raises three issues, as follows: (1) whether petitioners were
illegally dismissed; (2) whether they are entitled to their money claims; and (3)
whether the NLRC Decision had become final and executory.[14]

On the third issue, petitioners claim that the motion for reconsideration of
the NLRC decision is pro forma and therefore said decision had become final and
executory. The same does not merit any serious consideration inasmuch as
petitioners failed to show why the motion for reconsideration should be
considered pro forma.

The Court answers the remaining two issues in the negative because the
records are bereft of any evidence which will substantiate petitioners claims.
 In their appeal to the NLRC, petitioners stated that they were summarily
dismissed from employment at Roselle Cinema without notice and just cause.
[15]
Petitioners, however, did not elaborate on how their dismissal was effected by
respondents, i.e., whether respondents refused to admit them back to work;
whether their wages were withheld from them; or whether respondents elicited any
other act that can be virtually construed as termination of their employment. Even
in their petition before the Court, and in their Comment before the CA, petitioners
merely alleged in general terms that they were summarily dismissed, without
anything more.

The Court is well-aware that in labor cases, the employer has the burden of
proving that the employee was not dismissed or if dismissed, that the dismissal was
not illegal, and failure to discharge the same would mean that the dismissal is not
justified and therefore illegal.[16] The Court ruled in Great Southern Maritime
Services Corp. v. Acua,[17]to wit:

Time and again we have ruled that in illegal dismissal cases like
the present one, the onus of proving that the employee was not
dismissed or if dismissed, that the dismissal was not illegal, rests on
the employer and failure to discharge the same would mean that the
dismissal is not justified and therefore illegal. Thus, petitioners must
not only rely on the weakness of respondents evidence but must stand on
the merits of their own defense. A party alleging a critical fact must
support his allegation with substantial evidence for any decision based
on unsubstantiated allegation cannot stand as it will offend due process.
x x x [18] (Emphasis supplied)
 Respondents maintain that petitioners were not dismissed from work, but
voluntarily left their jobs. In their Position Paper, respondents alleged that
petitioners were their employees until they voluntarily left their respective jobs
without formally serving notice to their employers. [19] There was no dismissal to
speak of in the first place in this case.It was petitioners who, by their acts,
terminated the employer-employee relationship with respondents.

As found by the LA, petitioner Escanillas last reported for

work on January 5, 1997 after he was chastised by respondent
Trinidad for cleaning the semi-dark theater without a
flashlight. When he did not report for work the next
day, Trinidad sent an employee to check on him, and the
employee reported that Escanillas was not sick, but was driving
his tricycle. The next day, an employee was again sent to
Escanillas to tell the latter that he should report for
work. On January 16, 1997, Escanillas, who was then under the
influence of alcohol, went to see Trinidad and confronted
him. He was told to return only when he is sober. Escanillas left,
and was heard muttering that he was better off driving his
tricycle. Escanillas was also seen milling around the theater
premises with other men, in what Trinidad perceived to be an
attempt on Escanillass part to make good his previous threat
that he would pounce on Trinidad should Escanillas see him
outside. He never reported for work again.[20] The companys
security guard, Dominador Malocon, executed an affidavit
on February 18, 1998, in support of these claims. [21]

With regard to petitioner Martinez, he last reported for

work on January 15, 1997. In the evening of that
 day, Trinidad called him to replace a light bulb. Instead of
complying, he told Trinidad that it was not his job to do
it. Despite this, Trinidad asked him to report for work early the
next day because he has to assist the repairman that would be
coming to fix the electric fan; but Martinez did not report for
work the next day. It was discovered on January 16, 1997 that a
part of the company vehicle that Martinez drove was missing,
and the suspect for the loss was Martinez. Two days after he
last reported for work, Martinez assumed his new job as driver
with the Israel Pork and Beef Dealer, [22] as evidenced by a
notarized certification issued by its proprietor. [23]

The LA also found that petitioner Abad was not

dismissed. On January 31, 1997, Abad was asked to explain
regarding the missing shortages and overages on the canteen
stocks and remittances. She was also reminded to observe
decorum in the workplace, as there were several instances
when her suitors had been rude to Trinidad. Abad, however,
stated that she would rather resign than her personal life be
interfered with. Abad then verbally offered to resign and left
her station without getting her wages. [24]

Petitioners failed to refute respondents evidence. Unfortunately, petitioners

have only the following lame statements to say:

x x x The flashlight story involving Escanillas does not jibe with

facts of life because one cannot clean the semi-dark corner of the theater
holding flashlight, broom and dustpan, all three at the same
time. Besides, you clean the semi-dark corner of the theater before or
after the showing when the light is on and during the showing you clean
 the lighted corridors, alleys and comfort rooms. While the story about
bulb, electric fan and missing califer involving Martinez as told by
Trinidad only shows his inadequacy as manager of the theater. As
regards Edna Abad, love happens anywhere even in oval office, or
perhaps, in some chambers, the news sometimes revealed, it could
happen in theater canteen or in the seats. These circumstances as told
by Trinidad are not enough to show that the private respondents
voluntarily leave [sic] their works [sic]. x x x[25]

The Court agrees with the CA when it reinstated the LA decision. The Court
upholds the LA when he declared that x x x [r]espondents have submitted
substantial evidence in support of their claim that complainants were not
dismissed. Complainants [have] only their bare allegations in their position paper
that they were dismissed. They have not presented any corroborative evidence to
refute the allegations of respondents.[26]

The Court finds that the antecedent circumstances and petitioners

contemporaneous acts amply provide substantial proof of their voluntary
termination of employment.

On the part of petitioner Escanillas, he was not deprived

of his chance to return to work despite his disagreement with
Trinidad, and in fact, he was reminded several times by
Trinidad, through his employee, to report for work, but he did
not do so; he was seen driving his tricycle on a certain day
when Trinidad sent his employee to ask him to report for work;
and he was heard muttering that he was better off driving his
tricycle.
 The same goes with petitioner Martinez. Inspite of his
earlier insubordination, when he refused to change the light
bulb as ordered by Trinidad, he was asked to report early the
next day, but, like Escanillas, he did not return to
work. Instead, two days after he last reported for work with
respondents, he took on another job as a driver with the Israel
Pork and Beef Dealer.

With regard to petitioner Abad, apparently, she resented it

when Trinidad asked her to explain the shortages on her
charge, and when she was reminded to observe proper ethics
in the workplace. Consequently, Abad was heard saying that
shed rather resign, after which she manifested her intention to
terminate her employment by leaving her station without
getting her pay check.

These notwithstanding, however, the NLRC relied heavily on the fact that
petitioners filed a complaint for illegal dismissal, ruling that it negates respondents
theory of abandonment.

In the first place, this case does not involve abandonment as ground for
termination. Abandonment, involves termination of an employee by the employer.
[27]
The truth of the matter is that before respondent could dismiss petitioners on
ground of abandonment, petitioners filed with the LA their complaint for illegal
dismissal. In the present case, it must be stressed that there is no evidence showing
that respondents were actually dismissed by petitioners, let alone, on ground of
abandonment. Neither is there a showing that petitioners formally resigned from
work. What is actually involved herein is the informal voluntary termination of
employment by the petitioners employees.

Thus, petitioners filing of the complaint for illegal dismissal

should not have been the NLRCs sole consideration in determining
whether, indeed, they have been illegally dismissed. The filing of
a complaint for illegal dismissal should be taken into account
together with the surrounding circumstances of a certain
case. In Arc-Men Food Industries Inc. v. NLRC,[28] the Court ruled
that the substantial evidence proffered by the employer that it
had not, in the first place, terminated the employee, should not
simply be ignored on the pretext that the employee would not
have filed the complaint for illegal dismissal if he had not really
been dismissed. This is clearly a non sequitur reasoning that can
never validly take the place of the evidence of both the employer
and the employee.[29]

Given that petitioners were not illegally dismissed, but voluntarily

terminated their work, therefore, they are not entitled to an award
of separation pay and backwages.[30] Also,
petitioners Escanillas and Martinez are not entitled to any salary
from January 16-31, 1997 since they have already left
respondents employ by then. With regard to petitioner Abad, the
Court sustains the NLRCs award of her salary for said period in the
amount of P1,710.19, as it was shown that she resigned only
on January 31, 1997.
As to the award of service incentive leave pay (SILP), 13th month
pay, overtime pay, rest day and holiday pay premium, the NLRC
granted the award of these money claims as there is no proof that
these labor standard benefits were paid to petitioners for the year
1996. As noted by the NLRC, the Department of Labor and
Employment (DOLE) Regional Offices conduct their inspections
yearly,[31] and the restitution payroll covered only the years 1994-
1995,[32] which was admitted by respondents in their Position
Paper.[33] Regional Director Carlos L. Boteros, in its Order dated
February 16, 1998, stated that respondents have already
restituted to petitioners their respective labor standards benefits
as of February 13, 1996,[34] as signed and acknowledged by
respondents employees, which include petitioners, in the
restitution payroll dated March 31, 1996.[35]

However, records show that respondents failed to prove that

petitioners were actually paid these entitlements for the year
1996. The statement in the inspection report dated July 9, 1997,
by DOLE Inspector Joselito dela Banda that there were no labor
standards violation by respondents will not suffice to prove that
these benefits, in fact, have been paid. Thus, the Court sustains
the NLRCs award to petitioners of the following labor standard
benefits for the year 1996, viz.:

(1) EDNA ABAD

SILP P 437.50

13th month pay 2,850.31

Overtime pay 10,694.37

Rest day premium 1,338.75

Holiday pay premium 1,365.00

-------------

P 16,685.93

(2) JOSEPH MARTINEZ

SILP P 429.17

13th month pay 2,796.02

Night Shift differential 4,613.43

Overtime pay NONE

Rest day premium 1,313.25

Holiday pay premium 1,339.00

-------------

P 10,490.87

(3) ELISEO ESCANILLAS, JR.

SILP P 429.17

13th month pay 2,796.02

 Night Shift differential 4,613.43

Overtime pay NONE

Rest day premium 1,313.25

Holiday pay premium 1,339.00

-------------

P 10,490.87

WHEREFORE, the petition is PARTIALLY GRANTED. The Court of

Appeals Decision dated September 30, 1999 is AFFIRMED insofar only as it
reinstated the Labor Arbiters finding that there was no illegal dismissal. However,
the NLRCs Decision dated December 24, 1998 granting monetary awards to
petitioners Edna Abad, Joseph Martinez, and Eliseo Escanillas, Jr.,
is AFFIRMED but MODIFIED. Respondents Roselle Cinema and/or Silver
Screen Corporation are ORDERED to pay petitioners the following:

(1) Edna Abad P16,685.93

including salary for

Jan. 16-31, 1997 1,710.19

-------------

Total P18,396.12
 (2) Joseph Martinez P10,490.87

(3) Eliseo Escanillas, Jr. P10,490.87

No pronouncement as to costs.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN

Chief Justice
 Chairperson

SECOND DIVISION

[G.R. No. 121449. October 2, 1997]

SANYO TRAVEL CORPORATION and/or ARTHUR TAN and KELLY

TAN, petitioner vs. NATIONAL LABOR RELATIONS COMMISSION
and FLORENTINO HADUCA, respondent.

DECISION
REGALADO, J.:

In this petition for certiorari, petitioners Sanyo Travel Corporation (Sanyo, for
brevity), Arthur Tan and Kelly Tan assail the decision of public respondent National
Labor Relations Commission (NLRC), dated April 25, 1995, which reversed the
[1]

decision of the labor arbiter and found that Sanyo illegally dismissed private respondent,
Florentino Haduca. Petitioners likewise assail the resolution of the NLRC, dated August
10, 1995, which denied their motion for reconsideration.
Private respondent was hired by Sanyo as a tourist bus driver in November,
1989. He was assigned to its Transportation Department and was based in its bus
terminal in the then municipality of Makati, Metro Manila, where he usually slept.
In the evening of January 2, 1992, there was a commotion in the company
premises. A fistic free-for-all broke out among its employees who were allegedly
intoxicated. Drivers Ernesto delos Reyes, Eduardo Tuazon and Fernando Ortega, and
Vito Adel, a company security guard, were involved in the incident. Private respondent
was then in the company premises as he had decided to spend the night at the drivers
quarters. He was informed by Froilan Esteban, a co-employee, of the ongoing brawl.
Private respondent and Esteban went to the area where the commotion was taking
place. In the course of the affray, Tuazon boxed the security guard, Adel, who ran to the
guardhouse.Private respondent, his co-employees and Kelly Tan, a company manager
who was likewise present during the incident, followed Adel and pacified him.
The following day, said Kelly Tan submitted an incident report to the management.
Then on January 8, 1992, he ordered private respondent, together with Tuazon and
[2]

Delos Reyes, to report to his office where they were informed that they were being
terminated from employment effective immediately on the ground of gross misconduct
for their involvement in the fracas that previous week. They were handed termination
letters signed by Arthur Tan, Sanyos executive vice-president and chief executive
officer. Afterwards, the dismissed employees were asked to submit their statements on
the incident.
[3]

Private respondent submitted his statement the following day. By then, he, Tuazon
[4]

and Delos Reyes were no longer permitted to report for work. On the same day, Kidlat
Investigation Security Service, the security agency of Sanyo, submitted an incident
report on the slugfest. On January 17, 1992, private respondent was made to sign a
[5]

quitclaim releasing Sanyo from all future money claims.[6]

In February of the same year, private respondent filed a complaint for illegal
dismissal and for money claims before the NLRC where a hearing was held before the
labor arbiter. Among the evidence presented were the testimonies of private respondent
[7]

and of company manager Kelly Tan, the incident report of the latter dated January 3,
1992, and the incident report of the security agency of the company dated January 9,
1992. [8]

In August, 1993, during the pendency of the proceedings, the Transportation

Department of Sanyo to which private respondent was assigned was phased out due to
business losses. [9]

On June 1, 1994, the labor arbiter rendered a decision dismissing the complaint and
upholding the validity of the dismissal of private respondent on the ground of serious
misconduct. The labor arbiter further ruled that private respondent was not entitled to
the monetary benefits and damages which he was claiming. [10]

Private respondent appealed the decision to the NLRC. On April 25, 1995,
respondent commission reversed the decision of the labor arbiter and declared Sanyo
guilty of illegal dismissal. [11]

The NLRC found the evidence presented before the labor arbiter insufficient to
justify a dismissal on the ground of serious misconduct. In addition, it found that the
incident reports submitted by petitioner Kelly Tan and the security agency of Sanyo did
not contain any detailed narration of private respondents supposed commission of acts
of aggression and violence constituting his alleged malfeasance.
Absent both a valid ground for dismissal and due process, the dismissal could not
be sustained and private respondent was ordered reinstated to his former position
without loss of seniority rights and other benefits, and with full back wages. The NLRC
permitted private respondent to recover the monetary benefits claimed notwithstanding
the fact that he had executed a quitclaim releasing Sanyo from liability for benefits due
him.
Petitioners sought reconsideration of the NLRC decision but their motion was
denied.[12]

In the instant petition, it is claimed that the NLRC committed grave abuse of
discretion in reversing the decision of the labor arbiter. Petitioners argue that the NLRC,
in finding Sanyo guilty of illegal dismissal, relied solely on the incident reports of Kelly
Tan and the security agency of Sanyo. It allegedly disregarded the overwhelming
evidence presented before the labor arbiter which established that private respondent
was involved in the altercation and figured in acts of violence while intoxicated, hence
he was guilty of serious misconduct warranting his dismissal for cause.
Petitioners assert that the quitclaim executed by private respondent was binding on
him and, therefore, he could no longer claim monetary benefits against Sanyo. They
further claim that private respondent had executed a promissory note in 1990 by reason
of previous incidents wherein he was making trouble while likewise inebriated, thus his
[13]

involvement in the imbroglio of January 2, 1992 was a violation of that undertaking and
justified his dismissal.
On his part, private respondent denied any participation in that fight and claimed
that he was merely a witness who helped pacify the protagonists. He accordingly
contends that his dismissal was unjustified.
The issues in the instant case may be summed up as follows: first, whether or not
private respondent was validly dismissed by Sanyo; second, assuming that the
dismissal was valid, whether or not private respondent was accorded due process; and,
finally, whether or not private respondent is entitled to the monetary benefits claimed by
him.
After a review of the records, the Court finds the petition to be unmeritorious since
the NLRC did not commit grave abuse of discretion in reversing the decision of the labor
arbiter and in ruling that private respondent was illegally dismissed.
We are constrained to quote once again Article 277 of the Labor Code which
guarantees the right of an employee to security of tenure by providing that -

(b) Subject to the constitutional right of workers to security of tenure and their right
to be protected against dismissal except for a just and authorized cause and without
prejudice to the requirement of notice under Article 283 of this code the employer
shall furnish the worker whose employment is sought to be terminated a written
notice containing a statement of the causes for termination and shall afford the latter
ample opportunity to be heard and to defend himself with the assistance of his
representative if he so desires in accordance with company rules and regulations x x x
(Italics supplied).
 It is clear therefrom that the dismissal of private respondent may be sustained only
if shown to have been made for a just cause and with due process. It is also well settled
by jurisprudence that serious misconduct in the form of drunkenness and disorderly or
violent behavior is a just cause for the dismissal of an employee.
[14]

In determining whether or not private respondent was guilty of serious misconduct,

the NLRC reviewed the records of the proceedings before the labor arbiter. It found that
the evidence did not conclusively show that private respondent was a participant in the
fray which gave rise to this case.
[15]

The Court finds no cogent reason to reverse the findings of the NLRC. Indeed,
private respondent was not involved at all in the rumpus on January 2, 1992. While it is
undisputed that he was in the company premises and witnessed the incident, the
evidence does not show that he was a participant therein.
Moreover, there is no basis for petitioners contention that the NLRC relied solely on
the incident reports submitted by Kelly Tan and the security agency of Sanyo. The
NLRC reversed the decision of the labor arbiter after an evaluation of all the evidence
presented during the proceedings, primarily the stenographic transcripts of the
testimonies given during the hearing.For that matter, the incident reports aforestated did
not specify the particular acts which would indicate that private respondent was involved
in the rumpus or that he committed infractions and acts of misconduct. The Court is
consequently persuaded that, from all the evidence of record, the factual findings of the
NLRC sufficiently support its conclusions.
Neither was private respondent accorded due process. Private respondent was
entitled, under the law, to a written notice informing him of the causes for his dismissal
and an opportunity to present his defense or explanation before being dismissed. A [16]

week after the donnybrook, private respondent was informed of his dismissal. Prior to
this notification, he did not receive any notice of the intention of Sanyo to dismiss him,
neither was he given an opportunity to be heard.
Worse, it was only after private respondent was informed of his dismissal and was
handed his termination letter that he was told by the company manager to submit a
statement to the management explaining his side of the matter. When private
respondent submitted the required report the following day, he had already been
considered dismissed and was no longer permitted to report for work.
Sanyo claimed that between January 2 and January 8, 1992, it conducted an
investigation of the incident. There is no evidence supporting this claim. Moreover, to
repeat, the statement which private respondent was ordered to submit cannot be
deemed as compliance with the due process requirement because he was told to
submit it only after he had been dismissed.There is no evidence that private respondent
was accorded an opportunity to be heard prior to his dismissal.
Assuming arguendo that a valid investigation was conducted and due process was
accorded to private respondent, petitioners claims cannot be sustained because the
Court is convinced that the dismissal was unjustified, hence, the attendance of due
process becomes immaterial. It would be well to reiterate at this juncture that the
prerogative of management to dismiss an employee must be exercised without abuse of
discretion, for what is at stake is not only the employees position but also his means of
livelihood.[17]

The basic principle is that the employer has the burden of proving that the dismissal
is for just cause, and failure to do so would necessarily mean that the dismissal was
unjustified and, therefore, illegal. It is the employer who must prove its validity, and not
[18]

the employee who must prove its invalidity. To allow an employer to dismiss an
[19]

employee based on mere allegations and generalities would place the employee in a
dangerous situation. He would be at the mercy of his employer and the right to security
of tenure which this Court is bound to protect would be unduly emasculated. [20]

It is an accepted rule that fighting in the company premises may be considered as a

valid ground for dismissal of an employee but, in the case at bar, the facts do not
warrant application of the same because Sanyo has not substantiated its allegations of
serious misconduct. It has consequently failed to discharge the burden of proving that
[21]

private respondent was terminated from employment for just cause.

Employers are generally allowed a wider latitude of discretion in dismissing
managerial personnel or those of similar rank. However, the termination of employment
of ordinary rank and file employees, such as private respondent, requires proof of
involvement in the event in question. [22]

Respondent NLRC evaluated the evidence presented before the labor arbiter and
concluded that the charges made against private respondent were baseless. Doctrinally,
the findings of fact of the NLRC are conclusive on this Court, absent a showing that they
were reached arbitrarily. [23]

Sanyo cannot rely merely on the weakness of the defense of private respondent or
on his failure to present evidence to disprove the charge of gross misconduct. In the [24]

absence of substantial evidence, the contentions of Sanyo are self-serving and

incapable of showing that the dismissal of private respondent was justified.
The quitclaim signed by private respondent does not prevent him from filing a
complaint and recovering monetary benefits. The Court has repeatedly held that a deed
of release or quitclaim cannot always bar an employee from demanding what is legally
due him. This is because the employee does not stand on equal footing with his
[25]

employer and, in desperate situations, may be willing to bargain away his rights. This is
especially true where the quitclaim is made under circumstances where the
voluntariness of the agreement is questionable. [26]

In the present case, private respondent was not allowed to report for work after he
was notified of his dismissal, notwithstanding the fact that he disputed the validity
thereof. He was made to sign the quitclaim a few days after he was handed a notice of
termination from employment. Verily, private respondent was a man in need without the
privilege of a choice. That quitclaim should, therefore, not prevent him from recovering
what is rightfully his.
Finally, the contention of Sanyo that private respondent should be dismissed since
he violated the so-called Letter of Undertaking he executed in 1990 is an anathema in
law, not only because the Court is convinced that there was no just cause for the
dismissal of private respondent but, more importantly, because of the fundamental
policy that agreements designed to permit an employer to arbitrarily dismiss an
employee cannot be sanctioned.
Private respondent was dismissed without just cause and is entitled to
reinstatement with back wages up to the time of his actual reinstatement. However,
[27]

since reinstatement is no longer feasible as the Transportation Department of Sanyo to

which private respondent was formerly assigned has already been phased out, private [28]

respondent shall instead be entitled to separation pay equivalent to one month pay for
every year of service, without loss of seniority or other rights. This will be in addition to
back wages from the date of his dismissal up to the finality of this decision, minus the
[29]

amount of P3,402.41 which he received under the quitclaim.

WHEREFORE, the petition at bar is DISMISSED for lack of merit. The assailed
decision and resolution of respondent National Labor Relations Commission are
AFFIRMED, with the MODIFICATION that, in lieu of reinstatement, private respondent is
entitled to separation pay as above indicated.
SO ORDERED.
Puno, and Torres, Jr., JJ., concur.
Mendoza, J., on leave.

THIRD DIVISION

CELEBES JAPAN FOODS G.R. No. 175855

CORPORATION, represented
by
Present:
KANEMITSU YAMAOKA and

CESAR ROMERO,

Petitioner, YNARES-SANTIAGO, J.,

Chairperson,
CHICO-NAZARIO,
 VELASCO, JR.,
- versus -
NACHURA, and
PERALTA, JJ.

SUSAN YERMO, ORSON

MAMALIS, BAI ANNIE
ALANO, MICHIE ALFANTA,
GINALYN PANILAGAO,
ANNALIE AYAG, JOCELYN Promulgated:
AGTON, JOSE JURIE
October 2, 2009
SURIGAO, GILDA SERRANO,
JOY REMARGA, ERICK TAC-
AN and JENNE CARLOS,

Respondents.

x-----------------------------------------
---------x

DECISION

PERALTA, J.:

Assailed in this petition for review on certiorari are the

Decision[1] dated June 27, 2005 and the Resolution [2] dated
September 22, 2006 of the Court of Appeals, Mindanao Station,
Cagayan de Oro City, in CA-G.R. SP No. 73093.
Petitioner Celebes Japan Foods Corporation is engaged in the
business of buying, processing and exporting of tuna fish, with
buying station and plant located at the Davao Fish Port Complex,
Daliao, Toril, Davao City. Kanemitsu Yamaoka, Cesar Romero and
Kenji Fuji were the Chairman, Office Manager and Plant
Supervisor, respectively, of petitioner Celebes. Petitioner
contracted with Penta Manpower and Allied Resources to provide
manpower services for the former's business, with the latter
recruiting people to work for the former, people who included
respondents Susan Yermo, Orson Mamalis, Bai Annie Alano, Michie
Alfanta, Ginalyn Panilagao, Annalie Ayag, Jocelyn Agton, Jose Jurie
Surigao, Gilda Serrano, Joy Remarca, Erick Tac-An, and Jenne
Carlos. Respondents performed jobs such as slicer, laboratory
crew packers, recorders/encoders, loiners, vinyl bag
openers/receivers or storage persons, and who were necessary
and desirable to the main business of petitioner.

On November 7, 2000, respondents were refused entrance by the

guards manning the gate of the Davao Fish Port Complex, as they
were already terminated from work effective November 1, 2000
based on a memorandum[3] dated November 7, 2000 issued by
Romero, petitioner's office manager. The memorandum was
posted in the guardhouse.

On November 16, 2000, respondents filed with the Labor Arbiter

(LA), Davao City, a Complaint for illegal dismissal with money
claims for holiday pay, service incentive, leave pay, allowances,
unpaid salaries, damages and attorney's fees against petitioner
and Penta Manpower, alleging that they were dismissed without
just and valid cause and due process. Petitioner was served a
summons and a complaint.
On December 11, 2000, a mandatory conference was ordered but
the amicable settlement failed. The LA then ordered all the
parties to file their respective position papers. Respondents and
Penta Manpower filed their position papers, while petitioner did
not file any despite receipt of notice.

On July 2, 2001, the LA rendered a decision [4] in favor of

respondents, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered:

1. Declaring the dismissal of complainants as illegal;

and
2. Ordering respondents Celebes Japan Foods Corp.,
Kenji Fuji, Kanemitsu Yamaoka and Cesar B. Romero to
pay to complainants the award above set forth in the
total amount of P838,642.90 only.

SO ORDERED.[5]

The LA found that there was an employer-employee relationship

between respondents and petitioner; that respondents' works
were necessary to petitioner's business of processing tuna fish;
that as regular employees, respondents were entitled to security
of tenure; that Penta Manpower was a labor-only contractor, since
it did not have substantial capital or investment in the form of
tools, equipment and machineries, which were necessary for the
performance of the required services; and that it was petitioner
that actually managed, supervised and controlled
respondents' employment. The LA found respondents' dismissal
to be illegal, i.e., without cause and due process, and proceeded
to compute respondents' money claims.
Petitioner filed an appeal with the National Labor Relations
Commission (NLRC), Cagayan de Oro City, on the ground that the
former was deprived of its right to due process, and that the LA
rendered its decision contrary to law and applicable
jurisprudence.

On April 16, 2002, the NLRC rendered its Resolution, [6] the
dispositive portion of which reads:

WHEREFORE, the judgment appealed from is VACATED and

SET ASIDE in favor of REMANDING the entire records to
the arbitration branch of origin. The Labor Arbiter below is
hereby directed to accord respondent Celebes Japan Foods
Corporation and the other respondents their right to due
process by allowing them to submit their position paper,
copy furnished the complainants and other respondent
(PENTA), and after all the parties are heard, for the Labor
Arbiter to render its decision accordingly.

SO ORDERED.[7]

Respondents filed their motion for reconsideration, which the

NLRC denied in a Resolution[8] dated June 18, 2002.

Aggrieved, respondents filed a petition for certiorari with the CA,

alleging that the NLRC gravely abused its discretion in finding
that petitioner was denied due process and in remanding the case
to the LA for further reception of evidence.
 On June 27, 2005, the CA, Mindanao Station, Cagayan de Oro
City, issued its assailed Decision, the dispositive portion of which
reads:

IN THE LIGHT OF ALL THE FOREGOING, the petition is

GRANTED in part. This Court hereby DECLARES the
legality of the dismissal but ORDERS Celebes Japan Foods
Corporation to PAY each petitioner herein P50,000.00 as
NOMINAL DAMAGES for violation of statutory due process.
Further, this Court FINDS no cogent reason to remand the
case to the Labor Arbiter. [9]
The CA found that petitioner was not denied due process, since
the latter was duly informed that it was a party to the illegal
dismissal case filed by respondents, as shown by its receipt of the
summons, together with the complaint, as well as the LA Orders
directing the submission of position papers and informing the
parties that the case was considered submitted for decision; that
petitioner was given ample opportunities to defend its interest,
but it chose not to participate, which constrained the LA to
resolve the case based on available evidence; and that it was only
after an adverse decision by the LA that petitioner came out and
claimed denial of due process. The CA further found that the
NLRC erred in remanding the case to the LA for further
proceeding, since the NLRC was in a position to resolve the
dispute based on the records before it.

The CA then proceeded to decide the case by agreeing with the

LAs finding that respondents were petitioner's employees and not
of Penta Manpower, as the latter was merely engaged in labor-
only contracting. However, the CA found that respondents'
dismissal was for an authorized cause, as petitioner asserted that
the absence or termination of their work was caused by a
cessation of its operation as a consequence of prolonged lack of
adequate supply for high-quality fresh tuna. Although respondents
were dismissed for an authorized cause, the CA found that
petitioner did not comply with the statutory requirement of due
process; thus, it ordered petitioner to pay each of the respondents
nominal damages in the amount of P50,000.00.

Petitioner filed a motion for reconsideration, praying for the

reduction of the nominal damages awarded from P50,000.00
to P5,000.00 for each respondent, claiming that the financial
condition of the employer must be considered in fixing the
amount of nominal damages. It then submitted an audited
financial statement for the period ending December 31, 2004,
comparative financial statements from the years 2000 to 2004,
and its annual income tax returns for the same period, which all
showed that the company incurred capital deficits.
The CA denied the motion for reconsideration in a Resolution
dated September 22, 2006.
Petitioner is before us raising a lone assignment of error,
thus:

WHETHER OR NOT THE COURT OF APPEALS GROSSLY

ERRED AND/OR GRAVELY ABUSED ITS DISCRETION IN
MISAPPLYING THE DOCTRINES IN AGABON v. NLRC, JAKA v.
PACOT AND VIERNES v. NLRC BY REFUSING TO MODIFY
AND/OR REDUCE THE AWARD OF NOMINAL DAMAGES
FROM P50,000.00 TO P5,000.00 PER EMPLOYEE
TERMINATED AND IN THE ABSENCE OF ANY SPECIFIC
FACTUAL FINDING THAT THIS IS A CASE OF DISMISS NOW,
PAY LATER TERMINATION.[10]

The petition has no merit.

The CA ruled that respondents, who were petitioner's employees,
were terminated from work due to an authorized cause; and this
finding was never assailed by them, thus, already attained finality. In
fact, respondents in their Comment filed before us, accept such
finding by stating that there is no question that they have been
severed from their employment due to an authorized cause. The CA
also found that procedural due process was not observed in the
termination of respondents, since the latter was not served by
petitioner the required notice as provided under Article 283 of the
Labor Code; i.e., a written notice must be served on the worker and
the Department of Labor and Employment at least one month before
the intended date of termination. This finding was not disputed at all
by petitioner. Thus, it is settled that respondents were terminated
due to an authorized cause without petitioner complying with
procedural due process.

Where an employee was terminated for cause, but the

employer failed to comply with the notice requirement, the
employee is entitled to the payment of nominal damages pursuant
to our ruling in Agabon v. National Labor Relations
Commission and Jaka Food Processing Corporation v. Pacot.[12]
[11]

In Agabon, we found the dismissal of the employees therein to be

valid and for a just cause, since abandonment was duly
established. However, we held the employer liable, because
procedural due process was not observed. We ordered the employer
to pay, in lieu of backwages, indemnity in the form of nominal
damages, and we said:

The violation of the petitioners right to statutory due

process by the private respondent warrants the payment
of indemnity in the form of nominal damages. The
amount of such damages is addressed to the sound
discretion of the court, taking into account the relevant
 circumstances. x x x We believe this form of damages
would serve to deter employers from future violations of
the statutory due process rights of employees. At the very
least, it provides a vindication or recognition of this
fundamental right granted to the latter under the Labor
Code and its Implementing Rules.[13]

The Agabon ruling was qualified in Jaka which declared the

dismissal of the employees valid as it was due to an authorized
cause under Article 283 of the Labor Code, i.e., retrenchment, as
it was proven that Jaka was suffering from serious business losses
at the time it terminated respondents employment. However,
Jaka failed to comply with the notice requirement under the same
rule. We then distinguished the case from Agabon stating:

The difference between Agabon and the instant case

is that in the former, the dismissal was based on a just
cause under Article 282 of the Labor Code while in the
present case, respondents were dismissed due to
retrenchment, which is one of the authorized causes under
Article 283 of the same Code.

At this point, we note that there are divergent

implications of dismissal for just cause under Article 282,
on one hand, and a dismissal for authorized cause under
Article 283, on the other.
 A dismissal for just cause under Article
282 implies that the employee concerned has committed,
or is guilty of, some violation against the employer, i.e. the
employee has committed some serious misconduct, is
guilty of some fraud against the employer, or, as
in Agabon, he has neglected his duties. Thus, it can be
said that the employee himself initiated the dismissal
process.

On another breath, a dismissal for an authorized

cause under Article 283 does not necessarily imply
delinquency or culpability on the part of the employee.
Instead, the dismissal process is initiated by the employers
exercise of his management prerogative, i.e., when the
employer opts to install labor-saving devices, when he
decides to cease business operations or when, as in this
case, he undertakes to implement a retrenchment
program.

xxxx

Accordingly, it is wise to hold that: (1) if the dismissal

is based on a just cause under Article 282 but the
employer failed to comply with the notice requirement, the
sanction to be imposed upon him should
be tempered because the dismissal process was, in effect,
initiated by an act imputable to the employee; and (2) if
the dismissal is based on an authorized cause under
Article 283 but the employer failed to comply with the
notice requirement, the sanction should be stiffer because
 the dismissal process was initiated by the employers
exercise of his management prerogative.[14]

In Agabon, the nominal damages awarded to the employees for

a dismissal based on a just cause without the notice requirement
was P30,000.00; while in Jaka, where the dismissal of the employees
was based on an authorized cause under Article 283, but without the
required notice under the same rule, we fixed the amount
at P50,000.00.

Petitioner claims that in the above-mentioned cases, the

relevant circumstances surrounding the case, particularly the
financial condition of the employer, were taken into consideration
in fixing the amount of nominal damages; that the amount
of P50,000.00 for nominal damages awarded to the 12 employees
in this case is not reasonable, since petitioner has been having a
capital deficit of P43,629,974.46 for the last three years, with a
stockholders equity of only P2,750,000.00 or a capital impairment
equivalent to more than 15 times its stockholders equity. This
impairment differs from that of Jaka, since the latter has a P200
million equity and only a 47% impairment of capital, with six
employees terminated.

Petitioner's argument fails to persuade.

Jaka has presented its audited financial statement to show

that it was in such serious financial distress as to justify the
retrenchment of the employees concerned. As its retrenchment
program was undertaken in 1997, its deficit had ballooned to
123.61% of the stockholders equity; thus, a capital deficiency or
impairment of equity ensued; in 1998, the deficit grew
to P355,794,897.00 or 177% of the stockholder's equity. The
deficit was shown to prove the ground for the employees'
dismissal, but it was not the sole basis of the court in fixing the
nominal damages in the amount of P50,000.00 for each employee
for Jaka's failure to comply with the notice requirement. In the
same manner, while petitioner in this case incurred a capital
impairment which was much higher than its stockholders' equity,
the same should not be the only basis for determining the amount
of nominal damages that should be awarded. The gravity of the
due-process violation should be taken into special consideration;
[15]
and, just like in Jaka, the sanction should be stiffer, because
the dismissal process was initiated by the employers exercise of
its management prerogative.

Significantly, there was no bona fide attempt on the part of

petitioner to comply with the notice requirements under Article
283 of the Labor Code. Records show that on November 7, 2000,
respondents were refused entrance by the guards manning the
gate of the Davao Fish Port Complex, based on a memorandum of
even date issued by Romero, petitioner's Office Manager, stating
that respondents had been terminated effective November 1,
2000. Respondents learned of the existence of such
memorandum, which was posted only in the guardhouse on the
day they were refused entrance to the gate. There was indeed no
notice at all to respondents. Notably, there was not even any
reason stated in the memorandum why they were being
terminated. We cannot overemphasize the importance of the
requirement of the notice of termination, for we have ruled in a
number of cases that non-compliance therewith is tantamount to
deprivation of the employees right to due process. [16]
 Nominal damages are adjudicated in order that a right of the
plaintiff that has been violated or invaded by the defendant may
be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him.
[17]
Considering the circumstances in this case, we find no error
committed by the CA in fixing the award of nominal damages in
the amount of P50,000.00 for each respondent as indemnity for
the violation of the latters statutory rights.

Petitioner's reliance on Viernes v. National Labor Relations

Commission[18] to support its claim for the reduction of the award
of nominal damages is misplaced. The factual circumstances are
different. Viernes is an illegal dismissal case, since there was no
authorized cause for the dismissal of the employees; and the
employer was ordered to pay backwages inclusive of allowances
and other benefits, computed from the time the compensation
was withheld up to the actual reinstatement. In addition, since the
dismissal was done without due process, the nominal damages
awarded was only P2,590.00 equivalent to one-month salary of
the employee. In this case, the dismissal was valid, as it was due
to an authorized cause, but without the observance of procedural
due process, and the only award given was nominal damages.

WHEREFORE, the petition is DENIED. The Decision

dated June 27, 2005 and the Resolution dated September 22,
2006 of the Court of Appeals, Mindanao Station, Cagayan de Oro
City, in CA-G.R. SP No. 73093 are AFFIRMED.

SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice